Frequently Asked Questions
Want to know more about Florida's Homestead Laws? Get answers to common questions about Homestead, Portability, and Homestead Exemptions.
Frequently Asked Questions About Homestead In Florida
What is a Homestead Property in Florida?
Quite simply, your Homestead is a home where you reside with the intent to permanently remain there. If your home is located in a legal municipality, then your Homestead may include up to ½ acre of land together with the home on it, and if you live outside of a legal municipality, your Homestead may include up to 160 acres of contiguous land. It’s important to remember that if you happened to own some land with no home on it, and then you bought the land next door which had a home on it, that when you file Homestead you can include both parcels of land subject to the above limitations. It of course works the same way if you own your Homestead and you buy more adjoining or surrounding land in the future! You can stretch the protective shield of Homestead protection to the additional land subject to the acreage limits above.
The “Homestead Laws” are a combination of provisions in the Florida Constitution, subsequent Constitutional Amendments, Florida Statutes, and the Florida Administrative Code. These laws provide protection against certain Judgment liability and save you money on your property taxes through exemptions, reductions, and other methods.
What kind of judgment protection does Florida Homestead offer?
In general, your Homestead is protected against legal Judgments that may be entered against you. For example, if you are involved in an automobile accident and the other party sues you for personal injuries or death and obtains a judgment against you they would not be able to execute on that judgment to take your Homestead away from you, levy against it, or place a lien against it.
However, there are certain exceptions to this protection. If you don’t pay your property taxes, then the city or county can eventually take away your Homestead via the Tax Certificate and Tax Deed process. If you borrow money using your Homestead as collateral and you sign a mortgage which gives the lender a security interest or “mortgage lien” against your Homestead, then if you default on the loan the lender will be able to foreclose on your Homestead.
Additionally, if you have work done on your Homestead by a plumber, carpenter, or other worker to whom protection is afforded by the Florida lien laws, and you don’t pay for the work that was done, then the worker will be able to place a lien against your Property and eventually foreclose on the lien much in the same way that a mortgage foreclosure works. In Florida persons filing bankruptcy are generally able to exempt their Homestead from the bankruptcy filing, subject of course to the rights of any mortgage or other lien holders as reviewed above.
What are Florida Homestead Tax Savings?
Filing for Homestead saves you money on the “Ad Valorem” portion of your Property Taxes. “Ad Valorem” means “based on value”. In other words, Homestead Savings apply against any taxation on your home that is based on its value. The savings are provided in two ways: (1) by providing “exemptions” of various amounts against the “Assessed” (which basically means “subject to taxation”) Value of your home, and (2) by applying a “cap” against the amount that your property taxes can go up each year. The Cap actually is on the amount that your Assessed Value (remember, the Assessed Value is the value on which you pay tax) goes up each year. The Cap limits the amount of increase in your Assessed Value to 3% or the Consumer Price Index, whichever is less, each year. Hopefully after you buy your home your Market Value goes up substantially year after year (lot’s more on that below).
The difference in your Market Value and your Assessed Value is what we call your “Homestead Savings™”. You pay your property taxes on the Assessed Value and not the Market Value. Since your Assessed Value is held down by the Cap, this means that over the years as your Market Value goes up your taxes stay about where they were when you bought your home! For most people, this feature is the biggest savings they experience from the Homestead Laws.
The Exemptions help also- the most common one is an automatic Exemption that applies in the amount of $50,000 if your home is worth at least $75,000. This Homestead Exemption saves you almost $1,000 a year on your tax bill! Other exemptions are available for senior citizens, disabled veterans, deployed active duty servicemembers, un-remarried surviving spouses of first responders who died in the line of duty, widows/widowers, blind persons, persons who are required to use a wheelchair for mobility, and other disabled persons. Figuring out what exemptions are available and finding information on them can be a bit of a treasure hunt. The BEST way to make sure that you are taking advantage of all exemptions that you are eligible for is to run a Homestead Check™. We comprehensively analyze your situation to make sure you don’t miss anything.
What is Florida Homestead Portability?
The Portability part of Florida’s Homestead Laws let you move your accrued Homestead savings, up to a maximum of $500,000 to any subsequent home in Florida! However, the time between when you relinquish your current Homestead and establish a new one in Florida must basically be within 2 years (more detail below).
Let’s say that you buy a new home for $250,000 and you live there for the next 20 years. We all know that life is dynamic, and maybe your kids have left for college or you want to retire. Maybe you want to look at buying a different house that is more suitable to your new lifestyle. Now that 20 years have gone by that $250,000 house is worth $650,000! However, thanks to the “Cap” that we discussed above, your Assessed Value has only gone up to $275,000. So even though your house has a Market Value of $650,000 you’re only paying property tax on $275,000. Now you are thinking about moving to a new home that you want to buy for $700,000, but you realize that on the new house you are going to be paying property tax on about $700,000! Under typical tax rates in Florida, that means you’re probably only paying about $4,500 in tax on your current home, but if you move to the new $700,000 home you’re going to be paying almost $14,000 a year, and that might just keep you from deciding to move!
In 2007 (Effective Jan. 1, 2008) the Florida legislature passed a law that says that people who are selling their Florida Homestead and who establish another Homestead in Florida within a certain period (roughly 2 years), can transfer up to $500,000 of their Homestead Savings to their new home. This is called “Portability”. So if you decide to buy that new $700,000 home and you remember to file for Portability (which unfortunately many people forget), your Homestead Savings of $375,000 (Your Market Value of $650,000 – Your Assessed Value of $275,000) is transferred over to your new home applied as a deduction against the new home’s Market Value. This will save you about $7,500 EVERY YEAR that you own your new home! Obviously, forgetting to file for Portability is one of the most serious mistakes you can make with managing your Homestead Savings, and unfortunately it’s one of the most common! Portability also works if for some reason you don’t sell your current home, but rather relinquish its Homestead status.
Remember, your Homestead filing is considered to be effective on January 1st of the year, so long as ON OR BEFORE that January 1st you resided in the home with the intent to permanently remain there, and did not have a Homestead elsewhere. So, as an example, if you moved into your new home on Dec. 28th, 2018, then so long as you file for Homestead by March 1st, 2019, then your Homestead filing will be effective on January 1st of 2019. So long as you had a prior Homestead in effect in Florida in 2018 or 2017, you are eligible for Portability transfer of your Homestead Savings™.
What is the Time Test to be eligible for Portability?
1. Establish the year in which your new Homestead went into effect. (Example 2020)
2. Look at the TWO prior calendar years. (Example 2019 and 2018) If your prior home’s Homestead filing was in effect in EITHER of those two prior calendar years then you are eligible to file for Portability and transfer your Homestead Savings™ to your new home!
If I move into a less expensive home what is the Portability Ratio?
When you move from one Florida homestead to another, you can transfer all of your accrued Homestead Savings™ so long as you move to a home that has a Market Value the same or higher than the one you were leaving. If you move to a home of lower Market Value then you will be able to transfer over your Homestead Savings™ multiplied by the ratio of the lower Market Value Home to the higher one. So, for example, if you had $200,000 in Homestead Savings™ to move and you move from a home with a $500,000 Market Value to one with a $400,000 Market Value, then your transfer of savings will be $200,000 x $400,000/$500,000 = $160,000.
What are Florida Homestead Exemptions?
Exemptions reduce the taxable value of your Homestead property. The most common one is an automatic Exemption that applies in the amount of $50,000 if your home is worth at least $75,000. This Homestead Exemption saves you almost $1,000 a year on your tax bill! Other exemptions are available for senior citizens, disabled veterans, deployed active duty servicemembers, un-remarried surviving spouses of first responders who died in the line of duty, widows/widowers, blind persons, persons who are required to use a wheelchair for mobility, and other disabled persons. Figuring out what exemptions are available and finding information on them can be a bit of a treasure hunt. The BEST way to make sure that you are taking advantage of all exemptions that you are eligible for is to run a Homestead Check™. We comprehensively analyze your situation to make sure you don’t miss anything.
Where do I file for Homestead?
You will file for Homestead at the Property Appraiser’s Office for your county, or any designated annex or other filing site. To find out more, type in the name of the county of your new home and then “Property Appraiser”. For example “Broward County Property Appraiser”. Then look on the webpage, there’s usually a place to click for information about filing for Homestead. Be sure and review the items that the Property Appraiser requires you to bring with you to file so that you don’t get there and realize you don’t have something! Most Property Appraiser’s require that you bring (1) your driver’s license with the address changed to your new address; (2) a vehicle registration which shows a Florida address (usually it isn’t necessary that it be updated to your new address); (3) a utility bill which was mailed to the new address. You may bring a copy of your recorded property deed, but so long as it was recorded in the public records after your closing (which all should be within 30 days), you don’t have to bring it. The form you need to file is the DR501, and if you are eligible to file for Portability, then don’t forget to ALSO file form DR501T.
Do I have to file for Homestead every Year?
You only need to file for Homestead once per home in Florida. You will receive a card in the mail every year that tells you that the Property Appraiser shows that your home has Homestead filed on it. If it is still your Homestead then you don’t have to do anything! However, if it is NOT your Homestead anymore (maybe you moved again and it’s now rental property), then you MUST relinquish the Homestead filing on the property by contacting the Property Appraiser and informing them that you are no longer eligible for Homestead on that property. You can also generally relinquish the Homestead by checking the box on the card you get each year as well. Failure to do this can result in very severe penalties!
Frequently Asked Questions About Homestead Checks™
How much does a Florida Homestead Check™
A Homestead Check is not expensive, it only costs $250 if you put in the order yourself. If you have your Realtor or Title Company/Closing Agent handle it, then it’s $125. Problems with your Homestead Savings from incorrect assessed values and missed exemptions can cost you thousands of dollars in extra taxes every year that you live in your home.
When is the best time to get a Homestead
Because the value of your home is assessed every January 1st by your Property Appraiser, and because life is unpredictable (you never know for sure when you might need to sell your home), it’s a great idea to do a Homestead Check annually. Due to the ways that the property tax laws work, many of the worst losses to homestead savings happen because the homeowner didn’t know they would be selling their home and didn’t take action the year BEFORE they were selling their home!
How long will it take to get my Homestead Check
Your Homestead Check™ will probably be to you in the next 5 minutes after completing all of the questions and clicking send! Some Homestead Checks require extra work and if yours happens to be one of those then you will usually have your results within 24 hours. If you don’t receive your Homestead Check within 2 business days then please submit a service ticket to email@example.com
Why filing for your Florida Homestead can be
trickier than it seems.
County Property Appraisers are tasked with delivering a certified tax roll to the Florida Dept. of Revenue each year that meets certain guidelines. Unfortunately, the means by which they do this- using mass appraisal software and other methods, can cause errors in property valuations for individual homeowners. Additionally, many Property Appraiser offices don’t take the time with you to explain all of the available exemptions and walk you through the intricacies of filing “Filing for Homestead” seems simple on its face, but is in reality much more complicated. It’s important to understand not only the exemptions that you are entitled to, but to understand the law and concept of “Homestead Portability”, and to make sure that the Assessed and Market Values of your property are correct and don’t need to be adjusted.
How much can I save by doing a Florida Homestead
Making a mistake on Homestead Filing doesn’t just cost you money once, it costs you money EVERY YEAR that you own your property! It’s not like just getting kicked in the teeth once, it’s like getting kicked in the teeth every November! Not doing so could cost you up to $10,000 per year that you live in your Homestead. Not just for one year, but for EVERY year that you live in your property that is homesteaded. Every $10,000 in lost Homestead Savings costs you about $200 on your annual tax bill which you must pay EVERY YEAR that you own your property. Just forgetting to file for the $50,000 exemption- the most basic task in setting up your Homestead, will cost you about $1,000 per year EVERY YEAR. We have clients that have made mistakes that cost them almost $10,000 per year!
Can't I just figure all this out on my own?
Absolutely! But for some reason like we said above, over 75% of Florida homeowners don’t ever figure out how to maximize their savings. To do so, you’ll need to study up on the law and get a good understanding of the timing and intricacies of homestead filing, exemptions, portability, market value adjustments, Value Adjustment Board procedures. Or, you can just use Florida Homestead Check! It’s easy, it’s affordable, it’s smart.
What if I still have questions?
Your Homestead Check will give you a detailed explanation of any problems with your homestead savings and explain the process for fixing those problems. It will also give you valuable information and explanations on how to make sure that your homestead savings are maximized in the future. Most questions can be answered by just carefully reading the information that we give you. However, if you still need help you can purchase a counseling session with a Homestead Check counselor who is highly trained to explain the intricacies of the situation to you and answer your questions.